OUR PROJECTS - EGS Hungary

Geothermal solutions

Power Plant with an Enhanced Geothermal System in Hungary

In progress

The demonstration projects investment program of the European Commission announced a call for proposals in the NER300 award procedure for the development of low carbon dioxide emission technologies and the utilization of renewable energy sources.

According to the decision of Brussels, in one of the categories of „Geothermal Energy”, the EGS Hungary Consortium co-owned by EU-FIRE and Mannvit was awarded funding amounting to 39.3 million Euros for the development of the 116 million Euro project plan titled „ South Hungarian Power Plant with an Enhanced Geothermal System”. This is the first EGS (enhanced efficiency geothermal system) project of Hungary, which as a pioneer initiative will create an artificial geothermal energy source for the production of electricity in hot, dry geological rocks in South-Eastern Hungary.

Preliminaries

To reduce the emission of greenhouse gases, the European Union created the NER300 financing programme to offer awards supporting innovative, renewable energy technologies. In the fall of 2010 the Commission published a call for proposals in the NER300 award procedure for funding projects of the member states utilizing innovative, renewable geothermal energy. In February 2011 the Hungarian Ministry of National Development selected the South Hungarian EGS power plant project submitted by EU-FIRE EGS Hungary Ltd out of numerous submissions to participate in the programme representing Hungary. Following a comprehensive due diligence procedure, the project was deemed as the best in the geothermal category in Brussels and the Commission granted a financial award amounting to 39.3 million Euros for the implementation of the project, this being the direct source of the highest amount that a private business was awarded since we joined the EU, especially considering that this sum was awarded from an individual source and not encumbering the seven year development budget of a member state. The total investment budget of the project exceeds 116 million Euros.

The project is being implemented in close cooperation with the Ministry of National Development and the Ministry for National Economy. In October 2014 the Hungarian Government deemed administrative official matters related to the project to be of heightened significance (see Government Decree 263/2014 (X. 15.)).

The objectives of the project

The winning tender is the first enhanced efficiency geothermal project (EGS) in Hungary and in the region, which, as a pioneer project, is directed at exploiting a geothermal resource artificially created in the hot, dry rock formation in Southeast Hungary for the purpose of producing electricity. Only a few similar research and demonstration projects are currently in progress in Europe, the United States and Australia, indicating the global promising potential of EGS technology.

Traditional geothermal system or EGS?

The main risk of traditional geothermal system is always whether we will be able to find the suitable media for supplying water, particularly considering the required quantity and temperature of the water supply. In case of EGS systems, however; these risks are prevented due to the fact that we are attempting to locate hot rock formations instead of a media capable of supplying water and such formations are much more readily available than natural hydrothermal reservoirs.

The EU is committed to EGS technology, which they consider as the future of geothermal energy. Various resources have been established in Brussels, which particularly support the research, development and promotion of EGS technologies.

The technical characteristics of the envisaged system

During the implementation of the project, we will be creating a geothermal reservoir in in the County of Békés and constructing a geothermal ORC (Organic Ranking Cycle) power plant, which will be producing an annual amount of 11.8 MW electricity, as well as additional heat energy amounting to a total annual production of 74 MW for more than 20 years. The reservoir is created by the so-called hydro-shearing in a hot and already partially fractured rock formation; water is injected by high pressure and thus the existing fractures open up, expand and become connected, thereby creating a system, which fulfills a role similar to that of a natural hydrothermal reservoir. The envisaged size of the artificial reservoir is about 3 km3.

Production and reinjection wells are built into the new reservoir created, in the resulting closed cycle the water penetrates and flows through the hot rock and by absorbing the heat thereof, it warms up. Thereafter the hot water is brought to the surface via the production wells and by transferring the heat of the hot water onto another media, we produce electricity with the assistance of the turbines placed in the power plant. The cooled down water is then reinjected, where it is reheated in the closed cycle.

EGS technology is still currently in the research and development phase. The project is being developed with the involvement of the Icelandic geothermal giant, Mannvit; the company with its extensive experience of more than 50 years acquired a 5 percent ownership ratio in the project, the 95 percent majority owner of the project is the domestic EU-FIRE Ltd. This initiative is an international cooperation even in a broader sense since we will most likely involve significant professional companies as well from the US; France and South Korea and, in addition we are also in contact with the University of Nevada in the States. On the other hand, the main direction of the project is coordinated by the domestic companies.

According to the plans, the project will be finalized by the end of 2019, when, in addition to the production of inexpensive electricity, heat will also be produced as a secondary product, with which we can also provide local district heating or supply local agricultural, industrial businesses with heat energy extremely cost efficiently.

The positive effects of the EGS system

Enormous potential is embedded in EGS systems in that they significantly contribute to the Hungarian energy portfolio as a source of clean, renewable energy source, thereby facilitating the EU objective to be reached by 2020 that 20 % of the energy utilized originate from renewable energy sources. On the other hand, the project can also have a significant role in stimulating the local community and its social development since it will create employment in a region in a financially detrimental situation, as well as provide local businesses, industrial plants and agricultural establishments with the opportunity to further develop and progress.